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"What You Need to Know About the Choices
of Entities Available to You"
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that you have decided to start your own business, you, as an
entrepreneur, will find that there are several important decisions that
you must make that will affect the operation of your business. This
decision-making process involves a number of things in which the form of
entity and the major issues and factors that affect each form must be
taken into account.
One of the most important and complex decisions you
will face when starting your own business will be choosing the most
appropriate form of entity in which to operate your business. There are
several forms in which to choose from. Each form of entity produces
different legal and tax consequences. So what may be the appropriate
form of entity for one entrepreneur may not necessarily be the most
appropriate form for you. Knowing the legal and tax consequences of each
form of entity plays an important part in your decision-making process.
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Often, the choice of business form depends upon several
major issues including the needs and desires of the owner and also the
characteristics and needs of the business. It is very important to discuss these
issues with your tax, financial and legal advisor before making such an
important decision. Following is a list of some questions to aid you in your
discussion with your advisor to determine the most appropriate form of business.
Questions for discussion:
 | To what extent do you wish to shield your personal assets from the
liabilities and debts of the business? |
| What level of taxation do you want for the business? |
| To what extent do you want to allow others to manage the business? |
| How much restriction do you want regarding the transferability of interest
to third parties? |
| How many and what type of owners do you anticipate the business will have? |
| What is the appropriate capital formation for each entity? |
As a full service professional firm specializing in performing various types
of corporate services, Clausell & Associates is prepared to
assist you in making this very important decision.
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To view the pros and cons of each type of
entity, click here:
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This
information is general in nature and must be discussed
with your tax, financial and legal advisor before any action is taken.
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